Leda Braga stood on a stage at Geneva’s InterContinental hotel in February and sang Pharrell Williams’s Happy. “Can’t nothing bring me down, my level’s too high,” she shouted to about 80 employees of Systematica Investments, her new hedge fund firm, her voice hoarse after a day of meetings. “Nobody wanted to sing in the beginning,” says Braga, called Lady Braga by some colleagues. “I believe in leading from the front, so despite my lack of talent, I did sing.”
Braga, a 48-year-old Brazilian with a doctorate in engineering, had reason to be upbeat. After 14 years at Michael Platt’s BlueCrest Capital Management, she struck out on her own on Jan. 1, taking with her the two main BlueCrest funds she oversaw. In the first month of trading after the split, her biggest fund, BlueTrend, returned 9.5 percent, one of the biggest gains for any hedge fund in January.
Now she’s managing more money than any other woman in sole charge of a hedge fund. Along with BlueTrend, which has assets of $8.4 billion and trades futures in equity, bond, foreign exchange, and commodity markets around the globe, Braga runs BlueMatrix, a $600 million fund that trades equities.
Braga says she and Platt had considered the split “on and off” for some time, and parted amicably. “Leda is a great friend of mine, and we are still equity holders in her business,” Platt said in an e-mail. The move came after BlueCrest was criticized by a hedge fund advisory firm for not providing enough information about a fund open only to BlueCrest employees. Chief Financial Officer Andrew Dodd said last year that BlueCrest has made “adequate” disclosures to investors about the fund.
Braga’s BlueTrend and BlueMatrix are so-called systematic funds that rely on computer algorithms to make trades. “Systematic trading takes the emotion out of trading,” says Braga at her office in Geneva, overlooking the Swiss Alps. When a trader is forced to sell at a loss, “he takes that home with him,” she says. “A black box doesn’t care.”
Systematic investors program their computers to exploit correlations between stock and bond performance and other data, such as interest rates, economic growth, or even weather. “There’s a creative moment when you think of a hypothesis, maybe it’s that interest rate data drives” currency rates, she says. “So we think about that first before mining the data. We don’t mine the data to come up with ideas.”
Born and raised in Rio de Janeiro, Braga moved to London in 1987 to attend Imperial College, where she earned her doctorate. She spent about seven years as an analyst on the derivatives research team at JPMorgan Chase. There, she met Platt, who was on the bank’s proprietary-trading desk and left to start BlueCrest in 2000. Braga joined him the following year, managing $300 million for the BlueCrest Capital International fund. As her systematic strategy became more successful, she was given her own fund, BlueTrend, in 2004. It wasn’t until 2008, when her fund returned 43 percent during the worst year ever for hedge funds, that money began pouring in. BlueTrend’s annualized rate of return since it began trading on March 31, 2004, is 11.8 percent, compared with an 8 percent annualized return for the Standard & Poor’s 500-stock index.
Since Systematica separated from BlueCrest, its assets have grown to $9.2 billion from $8.5 billion. Braga says she’s planning to expand by creating new products, such as a fund that uses algorithms to trade over-the-counter derivatives and one that charges only management fees and doesn’t take a share of investing profits. Her standard fee is 1.5 percent of assets, plus 20 percent of profits.
BlueTrend’s assets have slumped from a peak of $15.4 billion in April 2013, when investors began pulling money after two mostly flat years. The fund declined 11.5 percent in 2013, then gained almost 13 percent last year. “Systematic models, like every other investment model, don’t work all the time,” says Ewan Kirk, chief investment officer of hedge fund Cantab Capital Partners and a friend of Braga’s. “We tend not to intervene with the car itself,” says Braga, who until recently rode a Ducati Monster 700 motorcycle. “But the engine gets fine-tuned.”
The bottom line: Braga manages more money—about $9 billion—than any other woman running a hedge fund.